Vancouver Taxi Association calls for cap on rideshare drivers

The Vancouver Taxi Association is calling for a cap on rideshare drivers, after the province announced Uber and other rideshares would be welcome in BC from December.

See also

• Ridesharing coming to BC in December 2017

To prepare for rideshare, the province is giving the taxi industry up to $1 million to develop an app and ICBC will spend $3.5 million installing crash prevention tech in taxis.

However, the province has also announced the elimination of the need for Class 4 licences for taxi drivers – and that has got the taxi industry angry.

In a statement released Thursday, the association claims Vancouver already has a “timely, affordable taxi service” available through apps, text, dispatch, hailing and taxi stands.

“The problem is that there are not enough cabs, because the Vancouver Taxi Association has been denied additional licenses to meet the demand.”

The reason, the association said, was to prevent “destructive competition.”

“That rationale still applies. If there is no restriction on the number of licenses, there will be a free-for-all that will result in a situation where no one can make a living.”

Consequently, says the association, no one will have the incentive to invest in wheelchair accessible taxi cabs and drivers will be left in debt with worthless licences.

“The public demand needs to be met, but not in a way that destroys the viability of the taxi industry,” said the statement.

“We are not saying that Uber should be prevented from entering the taxi market. What we are saying is that this needs to be done in a fair and equitable manner.

“That means putting a cap on the number of Uber or other new app-based entrants to the market to prevent destructive competition.”

Read the full statement:

The public wants timely, affordable taxi service that is available by on their phone — through apps and text messages — and also through traditional means — such as dispatch, hailing a cab, and taxi stands.

We already have that.

The problem is that there are not enough cabs, because the Vancouver Taxi Association has been denied additional licenses to meet the demand.

The Vancouver taxi companies are not insisting on a monopoly.

But the reason why the number of taxi licenses has been restricted historically has been to prevent destructive competition.

That rationale still applies. If there is no restriction on the number of licenses, there will be a free-for-all that will result in a situation where no one can make a living — much like what happened with truckers at the port.

The port situation led to work stoppages and other problems. The Government eventually solved the problems by restricting the number of truckers who could service the port.

It is surprising the Government hasn’t learned from the Port situation that allowing unregulated entry to the taxi industry will result in the same sort of chaos, which can only harm the public, just like it did at the port.

For example, no one will have the incentive to invest in handicapped taxis. That certainly is not part of Uber’s business model. Is this in the public interest?

There is also the harm to the existing license holders who have incurred enormous debts to purchase licenses that, under the Government’s free-entry proposal, will now effectively be worthless.

The Government’s proposal will destroy the financial wellbeing and livelihoods of many immigrant, small business people, who invested in the taxi industry on the basis of the existing regulatory regime.

Now, after going deep in debt, they have had their economic rug pulled out from under them by the Government, in order to benefit a large multi-national taxi business who has a very poor record in terms of service to customers (e.g. surge pricing) and treatment of its employees.

In some other jurisdictions where Uber has been allowed, governments have compensated the existing license holders for the loss of value of their licenses.

We do not propose this as a solution here, because it would be very expensive. But this shows that what the Government is proposing to do is very unfair to the existing license holders.

Some other jurisdictions, such as Austin Texas, have refused to bend to the demands of Uber for different taxi rules, in recognition of the unfairness to both the existing license holders and to the public.

The Liberal Government doesn’t see that. It says that its proposal would level the playing field.

But that is patently untrue.

The playing field was even — it is just that Uber did not want to comply with the existing rules that applied to everyone else.

Uber wanted new rules to fit its business model, and the Government gave this to them, after the Vancouver Taxi Association companies has been repeatedly denied the additional handicapped and other licenses that they needed to service the taxi needs of the public.

Insurance rates will now be drastically reduced to accommodate Uber — at the same time that the insurance rates of other drivers in the province are increasing significantly.

The Government can’t say that the existing insurance rates for taxis were too high. If that is so, the existing taxi license holders should be reimbursed for being overcharged for insurance over the previous decades.

To repeat, we are not saying that Uber should be prevented from entering the taxi market.

What we are saying is that this needs to be done in a fair and equitable manner.

That means putting a cap on the number of Uber or other new app-based entrants to the market to prevent destructive competition.

There is no sensible rationale for allowing unrestricted access to the taxi industry, or eliminating the existing municipal boundaries for taxis. That again will lead to destructive competition.

The public demand needs to be met, but not in a way that destroys the viability of the taxi industry.

What is also required is the setting of insurance rates for taxis on a basis that is fair to them and to other drivers.

We don’t expect other drivers to subsidize insurance for taxis, which will now be the case under the Government’s proposed insurance plan for taxis that has been introduced to meet the demands of Uber.

We are heartened that the NDP has expressed a desire to introduce a fair model for meeting the interests of taxi users while at the same time protecting the existing industry.

We look forward to working with the NDP to come up with a regulatory model that truly meets the public interest, and not a model that only benefits multi-national companies, such as the model proposed by the Liberal Government.